Background on the Mexican Secretariat of Finance and Public Credit (SHCP)
The Mexican Secretariat of Finance and Public Credit (SHCP) is a crucial government body responsible for managing the country’s public finances, including tax collection and debt management. Under its current leader, Édgar Amador Zamora, the SHCP has been working to stabilize and grow Mexico’s economy amidst global challenges.
Oil Revenue Growth: The Role of Government Injections
In recent months, the global oil market has experienced a downturn due to lower crude prices. This situation led to a decline in Mexico’s oil revenues. However, the SHCP reported a 14.7% annual increase in oil revenues following government injections into Petróleos Mexicanos (Pemex) for debt repurchase.
Detailed Income Breakdown
- With Government Support: The total oil income amounted to 922,400 million pesos, a 14.7% increase compared to the previous year.
- Pemex Income with Support: Pemex’s income, including government support, totaled 691,700 million pesos, a 6.4% increase from the previous year.
- Remaining Oil Income: The government also earned 231,700 million pesos through the Mexican Petroleum Fund and income tax from contractors and assignees.
Without the government support, oil income would have dropped by 16.9% annually, and Pemex’s income would have fallen by 30.2%. With the support, total public income grew by 7.0%, compared to 2.6% without it.
Tax Revenue Growth
Alongside the oil revenue growth, tax collections have also shown positive results. The SHCP reported 4.1 billion UMA (Units of Account) in tax revenue during the first nine months of the year, marking a 7% annual increase.
Key Tax Increases
- Impuesto Sobre la Renta (ISR): ISR revenue grew by 6.1% annually, thanks to higher wages, corporate profits, and financial returns, resulting in 60,000 million pesos more than planned.
- IVA: IVA revenue increased by 6.5%, surpassing the target by 53,000 million pesos due to resilient consumer spending and efficient customs enforcement.
- Impuesto Especial sobre Producción y Servicios (IEPS): IEPS revenue grew by 6.1%, while import income increased by 23.6%.
Key Questions and Answers
- What caused the increase in oil revenues? The 14.7% annual growth in oil revenues is attributed to government injections into Pemex for debt repurchase.
- How have tax revenues performed? Tax collections grew by 7% annually, with notable increases in ISR, IVA, and IEPS revenues.
- What factors contributed to the growth in tax revenues? Factors include combating tax evasion and contraband, updating the tax framework for digital platforms, resilient consumer spending, and efficient customs enforcement.
